Delta Adds to the Transcon Wars with Los Angeles – Washington Reagan

MIAMI — Delta Air Lines announced late last week that it would be adding service from Washington’s slot-restricted Reagan National Airport to its burgeoning hub at Los Angeles International Airport beginning April 24, 2017.

The new daily flight will take over from one of Delta’s two current daily flights between its Salt Lake City hub and Reagan, and will be served using an internationally configured 168-seat Boeing 757-200 with flat-bed seats that will be sold as domestic first class. To compensate for the loss of the second daily Reagan flight at Salt Lake City, Delta will instead add new nonstop service between Salt Lake City and Washington Dulles, which services most of the routes beyond the 1,250 mile perimeter at Reagan.

The Transcon Wars Find a New Battlefield

The introduction of flatbed service to Los Angeles from Washington Reagan once again creates a potential new battlefront for the roaring Transcon Wars. This recent era of low fuel prices and high profitability has created a new golden age for premium cabin travel on routes between the U.S. East and West Coasts.

The most aggressive airline has definitely been JetBlue in this regard, as it has used its Mint product on the Airbus A321 to add flatbed premium cabin services to cities as disparate as San Diego, Las Vegas, and Fort Lauderdale (the last a JetBlue focus city but not a premium market). But all of JetBlue, American Airlines, Delta, United Airlines, and Virgin America are competing on the same playing field.

Delta has been one of the only other carriers to expand its Transcon Wars presence beyond the primary markets of New York to San Francisco or Los Angeles, as it also offers flatbeds on some flights between Seattle and New York JFK. But Seattle and New York JFK are both Delta hubs, so this new route is Delta’s first salvo in a hub to spoke route.

Washington is also a market of strength for United (who has a hub at Washington Dulles) and American (who has a hub at Washington Reagan). American actually has two daily beyond perimeter flights to Los Angeles from Reagan which it may well shift to transcontinental configured Airbus A321s, though the three class First Class might be overkill in DC. At first glance, United might seem less inclined to match with Premium Service (PS) 757-200s from Dulles, as Dulles isn’t nearly the premium market that Reagan is.

But the same is true in New York City, and United has made that work by having hubs on either sides of both PS routes from Newark. The same would apply to Dulles – Los Angeles, and so perhaps United can make a couple of daily departures from Dulles with international 757-200s work (there are enough rotating through Dulles anyway due to trans-Atlantic flying).

Making Sense of Delta’s Western Hub Strategy

It is interesting that Delta chose to move the transferable Salt Lake City slot to Los Angeles over say Seattle, where Delta’s growth has cooled off in recent months after massive growth in announced route from 2013 to early 2016.

Reagan to Seattle is definitely a smaller market than Reagan to Los Angeles, but it is also less competitive with only Alaska Airlines offering two daily flights whereas at Los Angeles you have American with two daily flights and Alaska with another one.

More to the point, Reagan could be a really valuable feed market for Seattle as an Asian gateway and there’s enough origin and destination traffic to make the route profitable as a whole.

Why isn’t Delta running this route from Seattle? Irrespective of the answer, it now appears that Los Angeles is a market of intense focus for Delta, as it is for Southwest, American, and perhaps a merged Alaska-Virgin. Time will tell whether that situation is truly sustainable.